How Country of Origin Influences Overall Brand Equity

Abstract

The Present study is an attempt to explore how brand equity of branded cars is influenced by “the country-of-origin image”. In this regard, the perception of Iranian consumers of Hyundai, country-of-origin of which is Korea, was measured. A conceptual framework was applied to investigate the influence of country-of-origin image upon dimensions of brand equity. One should note that brand equity includes brand loyalty, brand awareness/brand associations, perceived quality, and brand strength. Accordingly, 362 Iranians were sampled out of a selected university and they were interviewed face-to-face applying a structured questionnaire. It was revealed that evaluation of country image affects brand evaluation. Marketing measures should be taken to improve brand strength, perceived quality, awareness/association, and loyalty level. Country of origin is a multi-dimensional concept which must be taken into consideration for enhancing brand equity.

Introduction

Today, the world has changed into a huge trading arena. Increasing demand for products that are out of reach in one hand, and the possibility to achieve the desired product for a less price somewhere else on the other hand ((O’Rourke & Williamson, 2002)), as well as the constant exposure of consumers to a great deal of product information through packaging, branding, advertising, and other channels has intensified this trading. Using information supplied to consumers via above-mentioned channels, their preferences and purchase decisions are shaped. It as well stimulates certain kinds of emotions, feelings, imagery, and fantasies. It was Dichter (1962) who mentioned first the contribution of a product’s country of origin to “the acceptance and success of products” (p. 116). Schooler (1956) empirically tested this hypothesis. He noticed a significant difference in acceptance of products that their only difference was their “made in” label (Verlegh et al., 1999). The impact of Country of Origin (COO) of brands on consumer perception has attracted wide attention since 1960’s (Schooler, 1965; Ditchter,1962) and has extensively been probed in marketing discipline (Peterson and Jolibert, 1995; Papadopoulos and Heslop, 2002). Several studies (Leifeld, 1993; Peterson and Jolibert, 1995; Verlegh and Steenkamp, 1999) have stressed the significant impact of COO on consumers’ brand perception and COO is a measure against which consumers evaluate the quality of the product. Personal experience or other sources form a product-country image for each consumer (Johans-son and Thorelli, 1985). These images associate peculiar products with peculiar countries, for example, Swiss watches, German Automobiles, Japanese electronics, USA appliances, etc.

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